Posts from 2005

• O’Reilly Radar > Podcast support in next version of iTunes
  iTunes to support podcasting – cool!!
  (tags: apple podcast radio rss)

John Batelle takes issue with Steve Job’s desire to fight all the way to the supreme court to protect his ability to keep Apple’s secrets from being outed by bloggers.

The comments to John’s post argue that John is wrong and Jobs is right.

That may be true in the court of law.

But in the court of public opinion, where Apple operates daily, this is a bad move.

As I was working on the previous post, I spent some time on Amazon checking out the comments on the new Dave Matthews Band record, Stand Up.

Normally you’d find about six or seven comments, all talking about the music.

In this case, most of the reviews are about the DRM system on the CD, not the music.

The music reviews are pretty bad too.

I don’t agree with the music reviews, I think its a good album, maybe not their best, but we have it in heavy rotation and like it a lot.

So I wonder if the fact that Dave Matthews put out a CD that you can’t rip music off of, you can’t get onto your iPod, and insults the fan base with its obnoxious digital rights management system has anything to do with the bad reviews.

Hard to say, but it sure doesn’t help.

I really have to wonder who is advising Dave Matthews on this stuff.  He has a rabid fan base, the kind that the Greatful Dead had. And yet he is adopting bad practices on the digital side.  He puts DRM on his CDs.  And his music isn’t widely available on digital music services like Rhapsody.

Someone should have a talk with him about this stuff.

UPDATE: As usual, a reader says it better.  I may not be able to automatically move comments up to the front page, but I can do it manually.  So here is Dan’s take on this issue.  This is what the music business doesn’t understand but they will someday.

It really was distrubing for me, a long time Dave Matthews fan, to hear
that his cd was locked down with some DRM. The music industry still
believes that they can "force" people to do it their way, instead of
giving people what they want. I don’t want a music on a cd, I want it
on my ipod. If I can’t do that, I’m not a happy customer. A friend who
purchased the CD before me, told me "not to bother," because he
couldn’t get it on his ipod. He told me to just download it off
limewire instead, where not only it was FREE, but it also worked with
all mp3 players. So here is a case where the free version wins, because
not only is the cost great but it is so much more convenient. I
would’ve gladly paid for the CD, but someone trying to control what I
do with my music just leaves a bad taste in my mouth.
The moral of the story: Not only did the DRM prevent or annoy paying
customers, but it also was unable to stop someone from ripping the CD
anyway and sticking it on limewire.

This week’s MP3 of the Week goes out to the Gotham Gal.

When we first met, she was my Brown Eyed Girl.

But now she’s my Dreamgirl.

This song is off the new Dave Matthews Band record, Stand Up.

Gary Rivlin has a story in today’s New York Times titled "So You Want to Be a Venture Capitalist".

It’s a good story line.  It goes like this. Everyone wanted to be a VC in the late 90s.  A bunch of big names tried it and didn’t make it.  The proof – they are now gone from the firms that hired them.

The problem with the story line is that its based on a small sample size of exactly three, Mitch Kapor, David Beirne, and Stewart Alsop.  And it uses the past five to six years as the time frame for the story.

I think the reality is very different.  All three of these guys are very talented people and would make great venture capitalists under different circumstances.

I think you need to look a lot more factors than Rivlin did to understand these stories.

The first place you need to look is at the firms.  NEA, Accel, and Benchmark are big firms now.  Each manages a large pool of capital and has a large investment team operating out of mutilple offices. I am not suggesting that such a structure is bad, but it does tend to create a hierarchy and a structure that often is not the best environment for learning the VC business at the partner level.

I couldn’t help but wonder if a smaller, more collegial partnership might have worked better for all three of these three guys.

The next thing you have to look at is the time frame.  Anyone entering the VC business at the tail end of the last bubble would have failed miserably.  If you did a lot of investing in 1999 and 2000 and that was the start of your venture track record, you’d have a hard time justifying your returns to anyone.

The fact that these three guys put up bad numbers in that time frame means that they performed about the same as everyone else in the business.

Finally, you need to look at the people.  I don’t know any of these three guys very well.  I’ve met them all at least once but I can’t speak to their talents as investors.  I suspect they didn’t love the venture capital business.  Many people who have been very successful in other tangential businesses decide to get into the VC business and find that they don’t like it.  They leave and move on to other things. 

I suspect that is what is going on with these guys.  Learning how to be a VC is tough.  And not everyone is good at it.  But I also think that it is a business you can learn to be good at if you love it, and if you give it time, and if you are in the right partnership. These ifs didn’t add up for the three guys in Rivlin’s story, unfortunately.

UPDATE: Silicon Beat says that Gary Rivlin is going to have a monthly piece on venture capital in the NY Times.  I hope Gary’s future work is better.

• Tagging Is It
  (tags: delicious tags re read_later for:joshua)
• WorldChanging: Another World Is Here: The Cash Machine Is Blue: why Wilco is Worldchanging
  Great post on Wilco’s impact on the music business
  (tags: music wilco)

Rhapsody Playlist of the Week.

1. The Way We Get By (Album Version) – Spoon

2. Wish I – Jem

3. Trouble – Ray Lamontagne

4. If I Could – Jack Johnson

5. Have A Little Faith In Me – John Hiatt

6. Friends – Ryan Adams

This week’s show is now available.

The Gotham Gal took over as the host and she ran a great show.

The big themes of this week’s show are rock concerts, rock stars, bat mitzvahs, and chocolate cake.

Give it a listen or add it to your podcasting software.

How do you get a job in VC?

It’s the second most common thing people ask me (after how do I get a VC to invest in my business?).

The truth is the odds of both are about the same.  Very long.

And as hard as I try, I really can’t help most of the smart, capable young people who come to my office asking me that question.  The demand for VC jobs is way in excess of the supply and probably always will be.

So I was pleased to see the blog post from Seth Levine of Mobius Venture Capital on this subject.

Seth has some good thoughts on the subject.  The best is the way he explains the economics of an entry level position in the VC business.

As a non-partner you are
fundamentally a cost center. The
partners are quite literally taking money out of their own pockets and giving
it to you. Rationally, they will only do
this for one of two reasons – either you are significantly impacting their
lives in a positive way that makes the trade-off worthwhile for them (you cost
less than the marginal life benefit they get from having you around) and/or you
will help create more carry (i.e., they can manage more deals with you around
and therefore deploy more capital; you have a skill set that will positively
affects the portfolio, etc.). If you
fail to do these things you are just eating up management fees.

Seth’s got this right.  VC firms are owned and operated by the partners.  They are small businesses where the profits flow to the partners.  Hiring decisions are very rational in this kind of environment.